The Business Record Exception to the Hearsay Rule
It turns out that the most popular post on this blog is the one about hearsay. At the time I wrote it, I didn’t realize it would be so popular, but I guess I shouldn’t be surprised. Hearsay is a very important concept in litigation, and it is also not very intuitive. As a result, lots of people search for information about it online to refresh their understanding of it. And since the rules are written in a complicated way, simple explanations may be popular.
To follow up on that post, I thought it made sense to write about an important exception to the hearsay rule: the business record exception. It can be useful to businesses that expect their records to help them in litigation. But it can be confusing to lawyers who may struggle with its technical requirements.
Why should you continue to read this post about the business record exception?
You want to know if this hearsay rule concerns vinyl records of the sounds of people doing business.
You’re in a trial right now and are searching online for how to introduce your client’s documents into evidence.
Nothing is on television right now.
Why The Exception Exists
The business record exception allows a party at trial to introduce a business’s record of an event as evidence of that event. For example, an employee’s time sheet may be evidence that the employee was present at work on a given day.
To understand why the business record exception exists, it is helpful to remember why trials generally exclude hearsay as evidence. It is because the most reliable testimony comes firsthand, from a witness who swears to tell the truth, who can be cross-examined, and whose credibility can be assessed by the judge or jury. The law considers evidence that lacks these characteristics to be less reliable.
But the law recognizes that some types of evidence is reliable, even if it lacks those qualities. One of those types are business records. This is because when businesses keep records in the normal course of their work, they have an incentive to keep accurate records.
The law also recognizes that it may be difficult for a business to produce evidence of a specific event if that event happens routinely. So, for example, if the business cleans its floors every day, it may be hard to find a witness who specifically remembers cleaning the floors on one particular day.
What Qualifies As a Business Record
Some people incorrectly assume that any document a business creates is a business record that qualifies under this exception. But the exception only applies to a certain type of record. According to Federal Rule of Evidence 803(6), the record must be: (a) “made at or near the time by — or from information transmitted by — someone with knowledge,” (b) “kept in the course of a regularly conducted activity,” and made because (c) “making the record was a regular practice of that activity.” Only certain types of records meet all three of these characteristics.
The type of record that fits this description best is one where a company employee regularly personally observes something and is required to write it down. So, for example, if a company requires a mailroom employee to write down in a notebook how many packages the company receives every day on the day they come in, that notebook may qualify as a business record. Or if a security guard writes down in a computer the time she observes employees enter and leave the office when they do so, that computer file may be an admissible business record.
But some business documents do not qualify. For example, if an employee creates a record of things she remembers from the past or heard about from others, but did not personally observe contemporaneously with making the record, that document does not qualify for the exemption. So this rule may not apply to a business’s investigation report (or a police report) that is based on the testimony of witnesses. And if the document does not concern a “regularly conducted activity,” but instead concerns a singular unusual event, it may not qualify either. Lastly, the rule only applies to reports that are created because it is the business’s regular practice to do so. As a result, the Supreme Court held that reports that a business makes specifically because of a lawsuit and not because they regularly make them do not fall under the exception.
How to Get Business Records Into Evidence
Even if a document meets the characteristics of a business record, it does not automatically get introduced as evidence. Instead, a witness needs to “lay the foundation” for the exhibit. To do this, an employee of the company needs to testify (or submit a certification stating) that each of the rules concerning the business record exception are met. Even if the witness did not personally make the record, the employee must testify that their knowledge of practices at the company qualify them to testify about how the company generally maintains records like the one at issue in the case. Lawyers often do this by asking four basic questions before asking the judge to admit the document as evidence:
Did the employee who made this record do so with personal knowledge?
Did the employee who made this record make it at or near the time of the event recorded in the record?
Does the record reflect a regularly conducted activity at the company?
Does the company keep records like this in the regular course of its business?
Before or after a witness lays the foundation for a business record, opposing counsel may object to the introduction of the record as evidence. Or they may make a motion before trial to exclude the exhibit through a motion in limine.